The Darjeeling Hills are frequently depicted as a region where fine tea flourishes, with the majestic Kanchenjunga serving as a prominent draw for tourists. The area is often idealised as a charming hill station, yet for the people, the reality is far more intricate and fraught with socio-economic challenges. While tea and tourism continue to generate substantial revenue, they also exacerbate structural inequalities, impede mobility, and entrench the population in a cycle of economic stagnation. Growing pressures from global market shifts, political unrest, and environmental changes have become familiar indicators of the Darjeeling Hills economy, succumbing to a phenomenon we economists would term "Dutch Disease" — an over-reliance on specialised sectors that renders a region vulnerable when those sectors falter. However, there is far more to this than meets the eye.
In Darjeeling Hills, the excessive reliance on tea plantation and tourism has resulted in an economy marked by a lack of diversification, thereby constraining employment prospects and impeding the local workforce's potential for higher wages or upward mobility. The region’s economy, much like those affected by Dutch Disease elsewhere, has become vulnerable to shifts in global markets. While Darjeeling tea continues to enjoy a premium reputation, the industry faces numerous challenges, including rising production costs, stiff global competition, and changing consumer preferences. Meanwhile, tourism, which thrives during peak seasons, also comes with its own set of pressures—crowding, environmental degradation, and a lack of resources to meet increasing demand. These dual challenges—one on the supply side and one on the demand side—are pushing the Darjeeling economy to the brink, exposing its dependence on these two core industries.
A Structural Trap
The Darjeeling economy has become intricately tied to the tourism and tea industries, yet both are prone to external shocks. The tea sector, with its labor-intensive practices, relies on a workforce that is largely confined to the hills, often working under poor conditions and with limited rights. Land tenure remains a significant issue for tea workers, most of whom live on company-leased land without ownership rights. As a result, many workers have no choice but to continue working in the tea gardens despite the low wages and lack of social mobility. Land reforms have stalled, and a slow-moving land distribution process has left workers in a state of socio-political limbo, with little prospect for improvement in their living conditions.
Meanwhile, tourism has become a mixed blessing. While the influx of tourists sustains local businesses, it has also led to overcrowding, rising costs, and a strain on local infrastructure. Low-income locals, who typically fill service jobs in the hospitality sector, are often stuck in a cycle of low-wage, seasonal work with minimal upward mobility. In fact, many workers acquire only the basic skills required to cater to the needs of tourists—skills that are transferable only within the tourism sector. As such, the local labor force remains largely unspecialized and vulnerable to fluctuations in tourism demand.
At the same time, both the tea and tourism industries face mounting pressures from external factors such as climate change and political instability. The recent decline in Darjeeling tea production, exacerbated by the free trade agreement with Nepal and shifting global preferences, has left many plantations in financial distress. Some plantations have closed, while others have reduced wages and benefits for their workers. Similarly, tourism is highly sensitive to political unrest and natural disasters, such as the 2017 strikes and the devastating impact of COVID-19. In both cases, the region’s reliance on these industries leaves it ill-prepared to recover when external events disrupt the status quo.
A Path Toward Diversification and Industrialization
The economic plight of the Darjeeling Hills reflects a broader problem that can be traced to a failure to diversify. As the region becomes increasingly reliant on two industries—tea and tourism—it has become highly vulnerable to market changes, climatic disruptions, and political volatility. Lack of economic opportunities have led to rising unemployment and surging migration of the region’s workforce to metropolitan cities and abroad for better work opportunities. What Darjeeling needs is a concerted push towards economically sustained diversification.
A concentrated push towards economic diversification requires investment in multiple sectors, based on Darjeeling’s strengths. Some potential avenues include agro-based industries, sustainable handicrafts and small scale manufacturing, education and skill based employment, eco-friendly and adventure tourism, entertainment industry (promoting its unique culture) and other sustainable development approaches. However, these can’t be achieved in a short period of time and require long term support from various stakeholders. Infrastructural development, incentivizing local business, collaboration with research institutes and grass root organizations are must for accomplishing this long term goal.
Henceforth, the need of the hour should be policy support towards sustainable economic diversification that benefits local communities rather than unplanned economic development solely driven by profit motives. By channeling growth in a sustainable way, Darjeeling can build a more resilient and self reliant economy. The success of the same depends on how well it is regulated and whether the local workforce gains meaningful opportunities from it.
In this context, the recent announcement allowing 30 percent of tea garden land for commercial use posits both opportunities and challenges to this region. While it may open up space for new economic activities, there is also a pressing need to ensure that these developments align with sustainability goals and genuinely benefit local communities rather than leading to uncontrolled commercialization that might displace workers or degrade the region’s ecological balance.
The Role of Government and Local Institutions
For Darjeeling to extricate itself from the grip of economic stagnation and the volatility trap, both the West Bengal government and the Gorkhaland Territorial Administration must undertake a sustained, resolute effort to diversify the region's economy. This cannot be accomplished through mere superficial policy adjustments or short-lived electoral promises, but rather through a long-term development strategy focused on infrastructure, education, and job creation. Crucially, this approach must be centred on the needs of the local population, ensuring that the fruits of economic progress are distributed equitably and that workers are empowered to participate in shaping their future.
The Darjeeling Hills stand at a pivotal juncture, where the challenge lies in striking a delicate balance between preserving its rich cultural heritage and fostering economic growth. A dedicated commitment to diversification, industrialisation, and environmental conservation presents the region with an opportunity to transcend its reliance on tea and tourism, paving the way for a more resilient and prosperous future for all its inhabitants. Without such a shift, Darjeeling risks remaining trapped between the nostalgic allure of its past and the stark realities of its future, persistently dependent on industries that no longer meet the evolving needs of its people.
Absent this transformation, Darjeeling will remain, as it has for so long, a jewel of the hills—beautiful, yet fragile. A region endowed with immense potential, yet still ensnared by its own economic paradox.
(Anuvishub Sanjay Tamang is an assistant political Economist at the Centre for Social Innovation and Foreign Policy. Urgen Dukpa is a Research Scholar of economics at IIT Roorkee. Views are personal)
URGEN DUKPA
The Darjeeling Hills are frequently depicted as a region where fine tea flourishes, with the majestic Kanchenjunga serving as a prominent draw for tourists. The area is often idealised as a charming hill station, yet for the people, the reality is far more intricate and fraught with socio-economic challenges. While tea and tourism continue to generate substantial revenue, they also exacerbate structural inequalities, impede mobility, and entrench the population in a cycle of economic stagnation. Growing pressures from global market shifts, political unrest, and environmental changes have become familiar indicators of the Darjeeling Hills economy, succumbing to a phenomenon we economists would term "Dutch Disease" — an over-reliance on specialised sectors that renders a region vulnerable when those sectors falter. However, there is far more to this than meets the eye.
In Darjeeling Hills, the excessive reliance on tea plantation and tourism has resulted in an economy marked by a lack of diversification, thereby constraining employment prospects and impeding the local workforce's potential for higher wages or upward mobility. The region’s economy, much like those affected by Dutch Disease elsewhere, has become vulnerable to shifts in global markets. While Darjeeling tea continues to enjoy a premium reputation, the industry faces numerous challenges, including rising production costs, stiff global competition, and changing consumer preferences. Meanwhile, tourism, which thrives during peak seasons, also comes with its own set of pressures—crowding, environmental degradation, and a lack of resources to meet increasing demand. These dual challenges—one on the supply side and one on the demand side—are pushing the Darjeeling economy to the brink, exposing its dependence on these two core industries.
A Structural Trap
The Darjeeling economy has become intricately tied to the tourism and tea industries, yet both are prone to external shocks. The tea sector, with its labor-intensive practices, relies on a workforce that is largely confined to the hills, often working under poor conditions and with limited rights. Land tenure remains a significant issue for tea workers, most of whom live on company-leased land without ownership rights. As a result, many workers have no choice but to continue working in the tea gardens despite the low wages and lack of social mobility. Land reforms have stalled, and a slow-moving land distribution process has left workers in a state of socio-political limbo, with little prospect for improvement in their living conditions.
Meanwhile, tourism has become a mixed blessing. While the influx of tourists sustains local businesses, it has also led to overcrowding, rising costs, and a strain on local infrastructure. Low-income locals, who typically fill service jobs in the hospitality sector, are often stuck in a cycle of low-wage, seasonal work with minimal upward mobility. In fact, many workers acquire only the basic skills required to cater to the needs of tourists—skills that are transferable only within the tourism sector. As such, the local labor force remains largely unspecialized and vulnerable to fluctuations in tourism demand.
At the same time, both the tea and tourism industries face mounting pressures from external factors such as climate change and political instability. The recent decline in Darjeeling tea production, exacerbated by the free trade agreement with Nepal and shifting global preferences, has left many plantations in financial distress. Some plantations have closed, while others have reduced wages and benefits for their workers. Similarly, tourism is highly sensitive to political unrest and natural disasters, such as the 2017 strikes and the devastating impact of COVID-19. In both cases, the region’s reliance on these industries leaves it ill-prepared to recover when external events disrupt the status quo.
A Path Toward Diversification and Industrialization
The economic plight of the Darjeeling Hills reflects a broader problem that can be traced to a failure to diversify. As the region becomes increasingly reliant on two industries—tea and tourism—it has become highly vulnerable to market changes, climatic disruptions, and political volatility. Lack of economic opportunities have led to rising unemployment and surging migration of the region’s workforce to metropolitan cities and abroad for better work opportunities. What Darjeeling needs is a concerted push towards economically sustained diversification.
A concentrated push towards economic diversification requires investment in multiple sectors, based on Darjeeling’s strengths. Some potential avenues include agro-based industries, sustainable handicrafts and small scale manufacturing, education and skill based employment, eco-friendly and adventure tourism, entertainment industry (promoting its unique culture) and other sustainable development approaches. However, these can’t be achieved in a short period of time and require long term support from various stakeholders. Infrastructural development, incentivizing local business, collaboration with research institutes and grass root organizations are must for accomplishing this long term goal.
Henceforth, the need of the hour should be policy support towards sustainable economic diversification that benefits local communities rather than unplanned economic development solely driven by profit motives. By channeling growth in a sustainable way, Darjeeling can build a more resilient and self reliant economy. The success of the same depends on how well it is regulated and whether the local workforce gains meaningful opportunities from it.
In this context, the recent announcement allowing 30 percent of tea garden land for commercial use posits both opportunities and challenges to this region. While it may open up space for new economic activities, there is also a pressing need to ensure that these developments align with sustainability goals and genuinely benefit local communities rather than leading to uncontrolled commercialization that might displace workers or degrade the region’s ecological balance.
The Role of Government and Local Institutions
For Darjeeling to extricate itself from the grip of economic stagnation and the volatility trap, both the West Bengal government and the Gorkhaland Territorial Administration must undertake a sustained, resolute effort to diversify the region's economy. This cannot be accomplished through mere superficial policy adjustments or short-lived electoral promises, but rather through a long-term development strategy focused on infrastructure, education, and job creation. Crucially, this approach must be centred on the needs of the local population, ensuring that the fruits of economic progress are distributed equitably and that workers are empowered to participate in shaping their future.
The Darjeeling Hills stand at a pivotal juncture, where the challenge lies in striking a delicate balance between preserving its rich cultural heritage and fostering economic growth. A dedicated commitment to diversification, industrialisation, and environmental conservation presents the region with an opportunity to transcend its reliance on tea and tourism, paving the way for a more resilient and prosperous future for all its inhabitants. Without such a shift, Darjeeling risks remaining trapped between the nostalgic allure of its past and the stark realities of its future, persistently dependent on industries that no longer meet the evolving needs of its people.
Absent this transformation, Darjeeling will remain, as it has for so long, a jewel of the hills—beautiful, yet fragile. A region endowed with immense potential, yet still ensnared by its own economic paradox.
(Anuvishub Sanjay Tamang is an assistant political Economist at the Centre for Social Innovation and Foreign Policy. Urgen Dukpa is a Research Scholar of economics at IIT Roorkee. Views are personal)
